E&IR October 2010 Newsletter

Posted on: 29 Oct, 2010 |
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The E&IR team is excited to
announce that Lorraine Buckley and her partner Anthony are engaged.
Ant popped the question on beautiful Santorini Island in Greece
during their recent trip through Europe. After 10 years together,
Lorraine is not planning on a long engagement!

November will see our Trainees rotate through the practice
groups, which means Matt Southwell will be moving into Commercial
Litigation and the E&IR team will welcome Vanessa Hardley.
Vanessa completed a double degree at Monash University, a Bachelor
of Arts and Bachelor of Laws. She may be familiar to some of you;
she completed a seasonal clerkship here at Cornwalls in 2007 and
has finished rotations through our Commercial Property, Banking
& Finance and Corporate & Commercial groups.

Paid Parental Leave: Reminder!

Eligible working parents of children
born or adopted from 1 January 2011 will be entitled to government
funded paid parental leave for the first time.

The key points to remember about this
new system are:

Employers only need to make parental
leave payments under this scheme from 1 July 2011. From 1 January
2011 to 30 June 2011 payments will be made by the Family Assistance
Office (FAO) unless an employer chooses to make the payments.

Payments under this scheme are at the
rate of the National Minimum Wage (currently $569.90 per week gross
/ $15 per hour) for a maximum of 18 weeks. The FAO will provide the
employer with the funds necessary to make the payments.

Payments under this scheme only need to
be made to eligible employees. Whether or not an employee is
'eligible' will be assessed by the FAO (employees must lodge their
claim for paid parental leave with the FAO).

Payments to employees should be made in
accordance with their usual pay cycle and a payslip should be
provided to the employee. Tax should be deducted from parental
leave payments but superannuation contributions do not have to be
made.

Government funded paid parental leave
is in addition to any other employer funded schemes.

Leave (annual/sick/carer's) does not
accrue to an employee absent on paid parental leave under this
scheme.

The Fair Work Ombudsman may investigate
any claims for failure to comply with obligations under this
scheme. Failure to comply could result a penalty of up to $33,000
(for body corporates), issue of a compliance notice or an
infringement notice.

OHS Harmonisation Update: NSW Backflip

In December 2009 each state and
territory agreed to introduce a new 'Work Health and Safety Act',
replacing all current occupational health and safety
(OHS)
legislation. The purpose of this is to 'harmonise' the occupational
health and safety laws in force around Australia, making it simpler
and cheaper for all parties (employers and employees) to know what
their respective obligations and rights are.

The content of the new Acts should
mirror that contained in 'model' legislation agreed upon by the
Workplace Relations Ministers from each state and territory in
2009. However, the future of the harmonised system has been put in
doubt after a backflip by the NSW State Premier, Kristina Keneally.
Premier Keneally has informed Prime Minister Julia Gillard that NSW
will now only enact mirror legislation if it can retain:

Union led prosecutions: the current
NSW system enables unions to independently prosecute employers for
safety breaches. Under the model Act a union would not be able to
commence a prosecution, but could request that a prosecution be
brought if an employer is not prosecuted within six months of an
alleged breach of the legislation.

Reverse onus of proof laws: in NSW an
employer is under an absolute duty to ensure the workplace health
and safety of employees and, if prosecuted, bears the onus of
proving it took reasonable steps to ensure safety. Under the new
legislation, the obligation would be on the prosecutor to prove the
employer breached its duty.

In 2009 the ACTU highlighted these two
issues as problems with harmonisation, arguing there should be no
'reduction in standards' in any jurisdiction under the harmonised
laws. Nevertheless, the NSW state labor government went on to
approve the model Work Health and Safety Act - a move which it has
now reversed. It appears this issue may feature high on the
election agenda; the NSW opposition leader, Barry O'Farrell, has
stated that if the coalition wins the NSW state elections in March
2011 it will pass the model legislation.

We will feature further developments
regarding health and safety harmonisation in future
newsletters.

Fair Work Australia Full Bench denies retailers' request for
short shift minimums

The Full Bench of Fair Work Australia
(FWA) has
confirmed its earlier decision of rejecting an application by
retail employers who sought to shorten casual minimum daily
engagements.

The current minimum engagement for
casuals under the General Retail Industry Award
2010(
Award) is three hours. The
retail groups sought to reduce the minimum shift for ordinary
casual employees to two hours. The application to vary the Award
was denied by FWA.

At first instance the applicants'
submissions were primarily based on the engagement of casual
school-aged employees, arguing that the current minimum shift
length restricted school students from working after school.

They had also argued that employers
were disadvantaged because they had been forced to extend the
shifts of their part-time employees, given that the 1.5 - 2 hour
shifts were unavailable to their casuals. The applicants claimed
this stripped hours away from the casuals, and made it more
difficult for employers who did not have flexible arrangements with
their part-time employees.

The parties opposed to the application
argued that, although school students may be presented with
difficulties when seeking casual employment in the retail industry,
the interests of casual employees generally should be taken into
account. The disadvantages to casual employees resulting from the
proposed provisions outweighed the disadvantages to casual school
students under the current provisions.

FWA observed that no evidence had been
put forward in support of a reduction in the minimum period of
engagement for casual employees other than for casual school
students. The fact that rural and regional supermarkets were
affected by the current provisions was not necessarily
representative of the entire population of casual employees in
Australia.

As such the Full Bench refused to grant
permission to appeal the FWA ruling, satisfied that it would not be
in the public interest to do so.

Things to Note

Minimum engagement periods are significant because they: (1)
provide protection to vulnerable employees; (2) ensure that
work-related travel is compensated for sufficiently; and (3) ensure
that part-time employees do not suffer reductions in their
hours.

It is important to note that FWA could not consider the
submission to create a provision in the Award specifically for
student casual employees because the issue had not been raised at
first instance. However, FWA did not see any barriers for such a
separate application to be made in future; that is, an application
to add a provision specifically allowing casual school students to
work two hour shifts.

Employment relationship must be over before lodging dismissal
claim

Fair Work Australia
(FWA) has
ruled that a worker given six months' notice could not start
dismissal proceedings because the employment relationship had not
officially ended.

In accordance with their enterprise
agreement (EA), the employer was entitled to terminate the
employment upon the giving of six months' notice if the employee
failed to attend a directed medical examination and his employer
concluded that he was not fit to carry out his usual duties. The
employee (who was not currently working) failed to attend a
directed medical examination and was given notice pursuant to the
EA.

Soon after being given notice, the
employee lodged a general protections application under s365 of the
Fair Work Act 2009 (Cth) (Act), which relevantly provides that a
person may apply to FWA to deal with a dispute if that person 'has
been dismissed'.

The employee submitted that his
employment had been terminated at his employer's initiative on the
day he was given notice of his termination. Even though the
dismissal had not yet taken effect, the employee argued that FWA
had jurisdiction to deal with the matter because he had been, for
the relevant purposes, 'dismissed'.

Deputy President Sams stated that the
interpretation of the provisions of the Act were 'relatively
straightforward'.

In his decision, the Deputy President
considered the words 'has been' to mean an event that has already
occurred or taken place, not one that may, is likely to or will
take place. For the purposes of s365, the relevant event is the
actual dismissal of the employee and not the giving of notice.

He went on to say that the act of
dismissal constitutes the severance of the employment relationship.
As the applicant continued to be employed by the employer and
presumably continued to accrue certain rights because of that
employment, the employment relationship had not been severed or
brought to an end at the employer's initiative. This was true
despite the employee not currently being at work.

'Has been dismissed' could not have a
prospective operation and therefore all that had occurred, in the
legal sense, was the giving of notice in accordance with the terms
of the industrial instrument. Consequently, the employee had not
been dismissed and was precluded from bringing the complaint at
this time. The Deputy President did note, however, that nothing
precluded the parties from initiating negotiations in order to
resolve their differences to avoid the likely claim when the
dismissal does take effect.

For employers

This decision highlights:

'Notice' and 'dismissal' are entirely
different legal and industrial concepts - the giving of notice does
not sever the employment relationship.

Employees must wait until the end of
their notice period (ie when the dismissal takes effect) before
they can lodge a general protections dismissal dispute.

There is no legal obligation on the
employer (or the employee) to engage in formal conciliation until
the dismissal takes effect (ie during the notice period).

Workplace Relations Highlights (Watch this Space)

The definition of 'small business
employers' for the purposes of unfair dismissal laws will come into
effect from 1 January 2011. The change simplifies the way in which
employees are counted for the purpose of deciding whether an
employer has fewer than 15 employees.

The newSex and Age Discrimination
Bill 2010 was introduced into parliament this month. The Bill
establishes breastfeeding as a new, separate ground of
discrimination, broadens the prohibition on discrimination on the
ground of family responsibilities, and strengthens protections
against sexual harassment in the workplace.

This month the
Paid Parental Leave Act 2010(Cth) came into effect, with payments to commence next
January. Employers should get on top of the legislation as soon as
possible. See our article in this month's newsletter on parental
leave entitlements.

A mine worker who reported to
work over the BAC limit set by the company was justifiably
dismissed according to FWA. Commissioner Bissett held that the
misconduct resulting in the termination was not that he
miscalculated how long it took his body to process alcohol, but
that he presented for work with a BAC in excess of that specified
in the policy, and this was a valid reason for
dismissal:MH v The Respondent[2010] FWA
7860.